In the usual course of my business, about 15 to 20 dentists visit my office every week, confidentially, to explore the various practices that we have for sale. One important part of this process is a review of the detailed equipment listings and photographs that are contained within a profession appraisal. On the other side, one of the most common questions we receive from vendors is, “what changes should I make before putting my practice up for sale?” There are many cosmetic improvements you can implement to make your practice more attractive to buyers, but there are a number of other issues related to new dental technologies that you ought to consider.
Purchasers are usually honest and frank in their opinions about the technology, equipment and facilities employed in practices they see for sale, and they express their thoughts openly about what equipment they find desirable and which items they consider to be of little or no value. They are looking for a meaningful way to negotiate a lower price when considering the purchase of a practice.
Below is a short list of the technology that, according to the purchasers, you might consider upgrading before placing your practice on the market. (I would like to thank Mr. Ross McCallum, Equipment Manager at Patterson Dental, for his assistance in compiling this list.)
1. Computers and Software (Unix, Xenix, and DOS based programs). The typical purchaser has become accustomed to the Windows environment for their home computer and does not want to buy a practice that uses outdated technology that may not support the emerging computer needs in a dental practice. I recommend updating your system two or more years before selling. This ensures that the system in fully integrated and that your staff is trained. I caution against implementing a brand new software package if you plan to sell in one year or less, as it may not be possible to fully integrate all your patients files in less than one year, and the data may be inaccurate. As well, your last year of practice ownership should be as stress-free as possible, and new software programs can sometimes present challenges. The investment you make in the hardware and/or software is normally recovered in the sale price, but you will not make a profit from the system itself. However, if your office becomes more efficient after a complete integration, you may see an increase in your income and recall effectiveness, and this usually influences selling prices.
2. X-rays. Due to the highly regulated nature of X-ray units, purchasers will have concerns about older units and will comment about their age. Older dental chairs, lights, and delivery units are usually forgiven, but the X-ray units are essential diagnostic tools that most purchasers will invariably compare to the units they used in university. Thus, they target older X-rays as an opportunity for price negotiations. My father sold hundreds of Siemens 50Kv X-ray units in the 1950s and ’60s, and many of them are still in perfect operation today; some of my more mature clients even suggest that they take better images than newer units. However, it is the buyer’s perception we must learn to deal with, and X-ray units are a hot topic of debate. An upgrade may be in order if your units are over 25 years of age and, due to the limited availability of parts, you may be better off financially to upgrade.
3. Intra-Oral Cameras. The first cameras appeared just over a decade ago, and while many of them continue to be effective, the original technologies of the IOC have been far superseded. An upgrade to your IOC, usually at a lower cost than 10 years ago, with substantially better function and utility, is highly recommended. The IOC continues to be one of the most powerful patient education tools invented and buyers view the IOC as an indication that you employ a modern, patient-education-based practice philosophy.
4. Sterilizing. The Statim, made by SciCan, has become the standard. Purchasers comment that one of the very first investments they will make is a Statim when older-style sterilizing protocols are in place. We recognize that many old steam sterilizers continue to function, but the expected standard has changed, and so has the dentist’s expectations of a speedy turn-around time.
5. Hand pieces. Non-fiber-optic high-speed hand pieces are not of any interest to a buyer. Although they more or less carried the last generation of dentists into the high-speed age, if they do not employ optics, today’s purchaser rarely desire them. Upgrade or discard them.
I have written many times about the procedures and issues to consider when preparing a practice for sale. Upgrading your equipment can be a simple, commonsense, and low-cost means of making your practice more attractive to buyers, and should be a relatively non-disruptive process for you and your staff. In the end, any investments you make should produce a sale price that is equal to, or perhaps higher, than the time and money invested.
Ontario Dentist – August 2003